Inner circles & high signal alpha

In our first letter, we wanted to give you some background information on ourselves. Growing up between my Spanish mother and German father, feeling foreign in both places, competing in youth sports, and navigating a family business, taught me early lessons about emotional control, handling variance, and keeping a tight circle.

We will continue to express our thoughts and share our personal experiences. In today’s edition we want to talk about trading, specifically in public. And I want to give my perspective of whether we are in a bull market already, or not.

I have been in crypto since 2017. Between studying psychology, loving stochastic math, and playing years of poker, I realized markets are just probability, human behavior, and gamification combined. I have been in countless group chats over the years. Subchannels, hundreds of members. I found that most of them become irrelevant within weeks. Most people there share a contract address after they bought to dump on you minutes later. Understand this and protect your capital.

Within small group chats, max 20 people, real alpha is shared. A thesis is developed and explained and everybody can enter at their own discretion. To be very clear, this can still go south and there is no guarantee that you make money in a “cabal”.

I have always been a people’s person. Shill me a token once and I will associate you with that token. Good or bad. So ultimately, what you share and what you did in the past determines my reaction towards you.

Take Ataberk and Merts for example. I have known both for years. I know both are deep in the trenches, scanning tokens, searching for alpha that lasts longer than a day. We have a group chat together. We worked together. We made money together. Trust is established.

Within that same group chat, there is a founder that just came back from a nine month mental health break. He instantly started shilling tokens and nfts. If it was my group, I would have kicked the guy nine months ago, but it ain’t my group or my decision to take.

If you follow me on X, you surely have seen me post about PingPing and Fu Shuang, two Pandas about to get shipped from China to Atlanta, USA. I did not come up with the thesis nor did I find the token, Ataberk did. He explained the thesis and it made sense. This was May 18th, the market cap of the token was around $42,000. I bought in, with size, and have held the token ever since. It’s currently trading at $1,520,000. A 3,519% increase.

The Pandas are still in quarantine in China, there was close to no media coverage yet. Xi Jinping will visit the States on September 24th and I expect the media circus to catch up on the Pandas during the visit. So while the token already did return 35x on my initial investment, there is reason to believe it will go even higher.

Conviction and holding on to tokens with a thesis, generally perform much better for me than trying to trade 15 tokens every day. Overtrading strips away your edge; I found that I, like most others, lose money trying this.

Quick Takeaways:

• Curate your circle: Get into a group of like minded people. Share and discuss your investment thesis transparently. If no one invites you to such a chat, create your own one. Cap it to a maximum of 20 people. Manage the group, cut out noise, and remove serial shillers.

• Grow with your people: Focus on building alongside those around you instead of chasing accounts already levels above. Real alpha comes from shared work.

• Thesis over noise: Hold high conviction positions through normal variance rather than paper handing into 15 micro cap trades daily.

• Scale out systematically: Never buy back into a token and always take profits on the way up. Sell in small tranches.

• Capital preservation first: Being 100% deployed is a failure of the risk framework. Always maintain liquid reserves. All wealthy people do.